I've never paid for a link. I just can't figure out the math required to calculate the ROI, and therefore the price which I should be willing to pay. I have a site which earns approximately 6 cents per unique visitor, but which receives a large number of visitors. The math I am missing is how many additional visitors each paid link would generate. Has anyone developed any good rules of thumb in this area?
About 6 weeks ago, I got an email from a reputable link broker offering a text link on a PR8 newspaper website for $250/mo. Since this is essentially an NPV problem, it therefore depends on many highly sensitive assumptions: lifetime customer value (marginal profit per user calculated in current dollars), your marginal increase in search-driven traffic attributable to the link, your cost of capital, etc. Just for fun, let's make some assumptions... assume you have a site ranking #16 for its keyword. You buy 3 PR7 links and estimate, all things being equal, these will move you to #6 for your keyword (NOTE: this IS and will only EVER be a wild ass guess). You figure at #6 position, you'll get 5,000 additional search visitors per month (another WAG, but not quite as bad because you can estimate the magnitude of the benefit by using Overture's Search Term suggestion tool and looking at the # of people searching for the keyword you're optimizing on). 5,000 additional search visitors/mo X $0.06 per visitor = $300/mo additional dollars in revenue. At $300/mo or $3600/yr, assuming you pay for the links as a one-time cost (as opposed to a monthly) and continue to receive 5,000 additional visitors in perpetuity, if your cost-of-capital is 20% (reasonable for a small business), those links will bring you $18,000 (3600/.2) over their lifetime. Some considerations: - PR is an exponential function (PR7 requires 10X more links than PR6), so the value of a PR6 link should be roughly 1/10 the value of a PR7. In practice, this isn't the case. Usually you pay about 50% to 33% less for a PR6 than a PR7 link. To me this suggests that the PR7 is a better deal. - As you site gains in popularity, you have less to gain by buying links (i.e. moving from #2 search result to #1 will result in fewer extra visitors than moving form #16 to #6). The value of the link depends entirely on the MARGINAL gain in traffic derived from a better ranking. - Google's patent mentions that they look for a continuous new links to a site, meaning that the links will probably become "stale" after a while and Google will stop giving you credit for them. This suggest that assumption about 5,000 extra users in pepetuity is false. Chances are, if you just buy the links and do nothing more, after a few months or maybe a year, you'll slide backward. -HOWEVER, there do appear to be increasing gains to top-ranking sites... Other people will link to you organically because they find your site in the top of the search results (a nice positive feedback cycle). But, you can get on the bad side of that feedback cycle and it can suck your site down into oblivion, too.
Will, If you don't know the answer to this, than I am screwed I had seen a site somewhere that compiled a bunch of data and then gave you a 'score' price. I will try to find it. McDar may have pointed it out previously.
Well I spend a couple of grand on links per month for my own site.. and sell severel times that to others. So, I guess I have some experience here. It always involves some sort of risk in the short term. Minimizing the risk until you've broken even is the key. Signing up for $100/month deals is not a huge risk. If your site is well optimized and you can break even in one week from added revenue, recovering the $100, you should expand your budget to say $200 in the second month. This would justify renewel of links month after month. For me the return needs to be at least 3-4 times the amount of what I spend on the links themselves to justify the risk. Just my two cents...
Well, I would do it if the return was 1.01 to 1. I just can't figure out how to measure and calculate ROI becuse I can't figure out how to measure the added traffic, because traffic fluctuates every month anyway. Usually upwardly.
For pure PR purposes, a PR4 link is worth something like 8 times more than a PR3. That makes a PR5 worth somewhere around 64 times as much as a PR3, and a PR7 worth somewhere around 4,096 times as much as a PR3. But... here's where it gets tricky... How heavily does PR factor in the Google algorithm? And what about Yahoo and MSN? For non-PR purposes, a bunch of anchor text from a bunch of low-PR pages may be worth a lot more than the raw PR numbers indicate. Exact numbers? I wish!
Anchor text isn't terribly important to the site I am thinking of buying links for, because no one searches for the domain name. Each individual page is optimized for a specific set of keywords. This is the offer I received today: Should I jump on it?
Like any link building, relevance of the page the link is on, number of links etc etc.. there is no real way to workout a very accurate ROI. It depends what terms you target, how well your site is built, your Adsense, affiiates, products, competitors, conversions. If I bought links that took me from 20 to number 1 for 'web design' it would be much better than taking you from 180 to 20. I figure it is up to you to utilize any links you buy in the right way. I would suggest testing small and working up.
I'd say, dont make your lifes too complicated with PR, Alexa.... Still, inbound links are important, especially when you've just launched your site and aren't getting any traffic - inbound links will help you get indexed with the SEs and this starts traffic going. Try to get into DMOZ & Zeal as long as your site isn't commercial. Pick one or two affordable ($20 - $40 one time fee) 2nd tier directories (Business.com, Skaffe.com, SevenSeek, BlueFind...). Find some (free) links on sites like www.strongestLinks.com Do some link exchanges with quality sites (great content, good PR & Alexa score)... "Make Your Links Work" is a free ebook that explains this subject in more detail All in all, don't become obsessed with linking strategies & don't spend too much time on it. Do the basics and then focus on creating valuable content for your visitors - that's the long-term way to success.
Just like in real estate a product is only worth what a buyer or buyers are willing to pay for it. To maybe answer your question though it depends on if the link is themed for your site or not, but I would say for a PR 8 $150 per month sounds about right depending on what type of sitr you are getting it from.